Many insolvency professionals registered with the IBBI are advocates by qualification, and advocates’ legal services enjoy a distinctive position under GST law: the recipient, not the advocate, pays the tax under the reverse charge mechanism. A Division Bench of the Delhi High Court — Justice Prathiba M. Singh and Justice Shail Jain — held on 13 August 2026 in Kanwal Chaudhary v. Insolvency and Bankruptcy Board of India, W.P.(C) 9410/2021, that this dispensation does not travel with the advocate into insolvency work: services rendered as an interim resolution professional are a distinct category, taxable on forward charge like any other supply.
How the question arose
The petitioner, an advocate enrolled with the Bar Council of Delhi since 1995, qualified as an insolvency professional after the Insolvency and Bankruptcy Code, 2016 came into force and was registered with the IBBI on 27 July 2017. In December 2018 the National Company Law Tribunal appointed him interim resolution professional of a company under corporate insolvency resolution. When he raised invoices for his professional fee, the resolution professional who succeeded him insisted on GST-compliant invoices. The petitioner demurred: as an advocate, he contended, his services fell under the reverse charge mechanism, so the tax was for the recipient to pay and no GST invoice from him was required. The dispute travelled to the High Court by way of a writ petition.
The competing positions
The petitioner’s case
An advocate remains an advocate whatever the assignment. Legal services by advocates are notified for reverse charge under the 2017 rate notifications, so fees earned as an IRP — work resting on his professional skill — should follow the same regime, without registration or GST invoicing.
What the Court held
Classification follows the service supplied, not the supplier’s qualification. An IRP’s functions under the Code are insolvency and receivership services — a specific classification entry distinct from legal services — and are taxable on forward charge under Section 9(1) of the CGST Act, 2017.
The reasoning
The Bench examined Section 9(1) and 9(3) of the Central Goods and Services Tax Act, 2017 alongside the rate notifications of 28 June 2017, the provisions of the Insolvency and Bankruptcy Code governing insolvency professionals, and the Scheme of Classification of Services, which contains one entry for legal services and a separate, specific entry for insolvency and receivership services. Several strands converged.
Forward charge is the default
Section 9(1) places the liability to pay GST on the supplier. Reverse charge under Section 9(3) is an exception, confined to the categories the notifications specify — legal services by advocates among them.
Function defines the supply
An interim resolution professional manages the corporate debtor, collates claims and runs the resolution process under the Code. These are statutory functions of an insolvency professional, performed by qualified persons from several disciplines — not legal services rendered to a client.
Specific over general
Where a specific classification entry covers the supply, it prevails over a general one. Insolvency and receivership services being specifically classified, the general entry for legal services cannot be invoked merely because the professional happens to be an advocate.
The Court accordingly held that insolvency professionals as a class are governed by the forward charge mechanism, that an advocate acting as one stands in the same position, and that the petitioner must furnish GST-compliant invoices for his fee as interim resolution professional. The writ petition was dismissed. Equally, the Bench preserved the existing position for the profession at large: legal services rendered by advocates remain under reverse charge, untouched by the ruling.
Why the decision matters
A substantial number of insolvency professionals on the IBBI register come from the Bar, and fee invoicing in resolution processes is a recurring point of friction between outgoing and incoming professionals, committees of creditors and corporate debtors. The judgment supplies a clear rule for all of them: the moment an advocate takes up an assignment under the Code, the billing for that assignment moves onto the ordinary GST rails — registration, tax invoice, forward charge — while his chamber practice continues under the advocates’ dispensation.
The decision also carries a caution for fee recovery. An insolvency professional’s fee ranks within the costs of the resolution process, but payment can be insisted upon only against compliant invoices. Professionals who treat IBC assignments as an extension of legal practice for tax purposes risk both delayed fees and exposure under the GST law for unregistered taxable supplies.
For advocates in Delhi weighing insolvency work alongside court practice, the practical checklist after this judgment is short: obtain and maintain GST registration before accepting an assignment, invoice resolution-process work separately and on forward charge, and reserve the reverse charge treatment strictly for legal services rendered as counsel. The two capacities now stand clearly demarcated in tax law, as they already were under the Code.
Frequently Asked Questions
What is the difference between forward charge and reverse charge?
Under the forward charge mechanism — the default rule in Section 9(1) of the CGST Act, 2017 — the supplier of the service registers, charges GST on the invoice and remits it. Under reverse charge, notified for categories such as legal services by advocates, the liability shifts to the recipient, and the supplier neither registers for that supply nor collects the tax.
Why did the advocate's claim to reverse charge fail?
Because the Court classified the supply by the nature of the service, not the qualification of the supplier. Work done as an interim resolution professional falls under the specific classification entry for insolvency and receivership services, not the entry for legal services, and the specific description prevails over the general.
Does the ruling change GST on ordinary legal practice?
No. The Court made clear that legal services rendered by advocates continue to be governed by the reverse charge notifications. The ruling bites only when an advocate acts in a different professional capacity — here, as an insolvency professional appointed under the Insolvency and Bankruptcy Code, 2016.
What should advocate-IPs do in practice?
An advocate who accepts assignments as a resolution professional should obtain GST registration, raise GST-compliant invoices for that work on forward charge, and keep the billing for insolvency assignments distinct from legal-services billing. The professional fee in a corporate insolvency resolution process is payable only against compliant invoices.